Two investors have bought a 50 per cent stake in the IFSC HQ of legal firm McCann FitzGerald. Property Editor Jack Fagan reports
Two investors have paid €34 million for a 50 per cent stake in the McCann FitzGerald headquarters building at 2 Harbourmaster Place in Dublin's IFSC.
The net yield is around 4 per cent before tax breaks are taken into account.
David Courtney of agent Spain Courtney Doyle had been quoting in excess of €30 million for the investment which carries tax allowances of €15.68 million.
All the capital allowances linked to the 12-year-old building will be available to the two purchasers.
The remaining 50 per cent stake is held by the Hibernian Group which acquired the interest as part of a larger property deal some years ago. The sale was greatly helped by the fact that McCann FitzGerald does not have any break options in its lease which has another 22 years to run.
However, the legal firm is planning to move to Grand Canal Docks in about two years when its new €90 million headquarters building has been completed.
Partners in McCann FitzGerald stand to net up to €35 million from a pre-sale and leaseback of the building with the Quinlan Partnership.
The legal firm will be hoping for a fairly dramatic pick-up in the Dublin office market in the meantime in the expectation that it will be able to assign its lease to either a new trader or an existing international company looking for larger premises in the IFSC.
While there seems every likelihood that McCann FitzGerald will be able to find a replacement tenant, they may have to underwrite the rent level which is now considered on the high side, particularly with so many developers offering rent-free periods and fit-outs in an attempt to attract in tenants.
The overall rent for the seven-storey, 5,705.3 sq m (62,412 sq ft) block is €3,026,801. The rent works out at €502 per sq m (€46.66 per sq ft) which is probably near the top end of the rental market in the IFSC.
There are 54 car-parking spaces in the basement rented at €3,175 each. The lease is held by named individuals in McCann FitzGerald. It provides for upward only rent reviews at five-yearly intervals, the last in 2001.
Even in a slow office market, the building will always attract attention because of its location at the front of the IFSC and next to a number of major transport hubs, the latest being the Luas, due to start running this year.
The block has also benefited greatly by the removal of the CIÉ ramp into Connolly Station which had partially blocked the view from Amiens Street.
The building is the third to come on the market at the front of the IFSC in recent years.
Both Bank of Ireland and AIB have managed to offload their buildings to investors.
